Property Tax to Rise in 2013

Those who live in Housing and Development Board (HDB) flats of 3 rooms and above can expect their property tax bill to rise by $40 to $50 in 2013, even after a newly introduced $40 rebate.

Because the revised Annual Values (AVs) of 1 and 2-room flats remain below $6000, those who live in these flats will not need to pay any property tax. This rule remains unchanged from 2012.

The increase in property tax is to reflect the 8 to 13% increase in market rentals, which was in turn, reflected in the revision of Annual Values. The one-time rebate of $40 is an effort by the government to ease the pinch from the increase in the property tax for lower and middle-income households. 94% of HDB flat owners will receive the rebate.

The review of the AVs of all properties is conducted every year by the Inland Revenue of Singapore (IRAS). It is based on the estimated annual market rental of a property, should it be rented out, and is used to derive the payable property tax.

For non-owner-occupied homes, payable property tax is calculated at 10% of AV. For owner-occupied homes, tax is paid at concessionary rates of 6% for AVs exceeding $65,000, and 4% for AVs between $6000 and $59,000. AVs below $6000 are not taxed.

The increase of property tax for owner-occupied 3-room to Executive HDB flats ranges from $39 to $51.